We often hear that every disaster provides an immense opportunity. Opportunity, for whom? It is invariably an opportunity for business. The more the sale of industrial products, more is the contribution to the economy, and therefore more is the GDP. What happens to human beings and the environment in the process is not any one's concern.
I wasn't therefore surprised to read a news report today: US gun lobby says firm 'no' to gun control (Indian Express, Dec 25, 2012. http://bit.ly/Y8sjIF). After all, how can the gun industry in the US be held responsible for the frequent children massacre being witnessed? Instead of curbing gun sales, shouldn't the US government appoint more policemen around schools and if need be around each home? Well, that's the way industrial lobbies work, and we shouldn't forget America is the land of lobbies.
In India, we are fast catching up. The continuing agrarian crisis, which has taken a heavy human toll with 290,470 deaths reported from suicides in past 15 years, provides a huge market for selling machines. Somehow the feeling is that more machines you sell, more sanity would prevail on the farm. Agriculture is being viewed as a machine-deficit sector, and more the machines sell more will be the reduction in farmer suicides. At least, this is what is visible from the way State Governments are aggressively promoting machines for the trouble-torn farming sector employing 57 per cent of the country's workforce.
Take Punjab, the country's food bowl. At a time when two farmers are committing suicide ever day, and indebtedness is growing with every passing year, 20,000 big tractors are being sold every year. These tractors are now of 90-105 horse power range, which is beyond any economic rationale. After all, in a State where the average land holding size is less than two hectares what is the need to promote such huge tractors (reminiscent of the Soviet Union era)? Moreover, every second farm household in Punjab already owns a tractor. Once the symbol of pride, tractor has already become a symbol of suicide. And still, the Punjab government is aggressively promoting tractors.
In neighbouring Haryana, more farm implements are being pushed. I agree there is a shortage of farm labour, but will the sales of all kinds of machines take out farmers from the crisis? Why can't the Haryana Farmers Commission instead urge the formation of cooperative societies which help in leasing farm implements to farmers? I suggest setting up farmer cooperative societies rather than setting up another State agency. But then, this will be opposed by the agribusiness industry just like the gun industry in US is opposed to any move to curb the gun sales.
The subsidy for land leveller has been increased from Rs 50,000 to Rs 75,000; on multiple crop planter from Rs 10,000 to Rs 20,000; on happy seeder from Rs 25,000 to Rs 50,000; on straw reaper from Rs 40,000 to Rs 60,000 and on zero till machine from Rs 15,000 to Rs 20,000. Haryana Chief Minister said yesterday that funds for modernisation of agriculture have also been raised from Rs 1-cr to Rs 3-cr. So if you have something to sell in the name of helping farmers, you too can make a lot of money. Rush to Punjab and Haryana (and the rest of the country too will gradually pick up from these two frontline farming States) and sell whatever you can in the name of helping farmers. Lobbying by the agribusiness industry has helped dole out subsidies making the machines cheaper to buy. What happens to farmers (and the destruction wrought on the natural resource base) in the process should not be your concern. After all, this is how business operates.
India: Direct cash transfers is aimed at dismantling food procurement, and moving away from food self-sufficiency.
Some weeks back, I was participating in a panel discussion on cash transfers on a national TV channel. While the discussion wheeled around the merits and demerits of cash transfer, I think the anchor was taken by surprise when I said that cash transfers is in effect a ‘cash-for-vote’ programme. Supporting my argument with a World Bank study for Latin America, I found the entire focus of the discussion thereafter shifting to whether the real intention behind the aggressive push for cash transfers is aimed at the 2014 elections.
While the media as well as most panellists who frequent the TV channels, for some strange reasons, were and are still reluctant to talk about the political ramifications of cash transfers, it was Rahul Gandhi who made it abundantly clear when he told his party men that cash transfer could win them not only 2014 but also the 2019 general elections. The entire academic euphoria over the proposed aggressive roll out of Aadhar-based (UID-lined) cash therefore is simply overbearing and needs to be seen in the light of political bias. In fact, the visible trend in the ongoing national debate is more towards being seen as politically correct.
A World Bank working paper, entitled: “Conditional Cash Transfers, Political Participation and Voting Behaviour,” studied the voting behaviour for a conditional cash transfer programme launched in Colombia just before the 2010 elections. Subsequently, a 2011 study of an unconditional cash transfer programme in Uruguay clearly established that cash transfers did help the ruling party get a large share of the votes, and thereby helped the party to romp home at the back of cash transfers. In India, the political urgency and the aggressiveness with which the massive cash transfers are expected to cover the entire country by April 2014 is therefore quite obviously aimed at bringing electoral benefit to the ruling party.
The unconditional direct cash transfer programme that is proposed to be launched from Jan 1 in three phases will start with 43 districts involving a cash provision of Rs 20,000-crore. Eventually, all forms of subsidies to the poor, including food and fertiliser, will be in the form of cash flow, and would add up to Rs 3 lakh crore annually. I fail to understand how and why such a massive cash outflow pipeline will reach the beneficiaries without first putting up a fool-proof delivery system in place. The Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) too was envisioned with a lot of expectations but has failed miserably to deliver. Several studies have pointed to nearly 70-80 per cent leakages, and yet somehow the impression is that MNREGA has transformed the rural economics.
With only 40 per cent of the population having access to banks, and with an over ambitious target of reaching the remaining population through banking correspondents – who will be operating like the village postmen except they will now be equipped with portable handheld machines acting like micro-ATMs – we are perhaps expecting too much from the most important human link between the technology and the money delivery. So far, there are only 70,000 banking correspondents and the experience has not been very encouraging. In the next one year, the number of banking correspondents will have to increase ten-fold to reach a staggering figure of 7 lakh.
Knowing that the entire rural and agricultural banking operations are rooted in corruption, I wonder how we have accepted that the banking correspondents will not be swayed by corrupt practices. If 60 per cent of the beneficiaries have to be reached through an army of banking correspondent, who will be handling over Rs 1.5 lakh crore by any conservative estimate, the delivery mechanism is certainly fraught with over-confidence stemming from political urgency. This is where I think the policy makers and bureaucrats have failed to rise above assumptions. This is where I think the aadhar-based cash-for-vote will end up being no different than the hype generated at the time of launching MNREGA.
Nevertheless, what worries me more is when cash transfers move to the next phase, and that means meeting food entitlements directly with cash. Thanks to the concerns raised by the civil society, the government has deferred cash-for-food for the time being. It was more because of the fear that the cash-for-food programme could go completely out of control, and therefore could negate the political advantage that the ruling party is hoping to garner, that it has been kept in abeyance. At a time when the proposed National Food Security bill is pending introduction before the 2014 elections, any tampering without a proper evaluation could backfire.
It is true that close to 60 per cent of the food that is channelized through the public distribution system is either wasted or siphoned off in transit, and that the entire system is mired in corruption. What reaches the poor beneficiaries is often not even fit for consumption. The answer however does not lie in dismantling the PDS system, but reforming the world-largest food delivery system to riddle it of corruption, and make it more effective. This is certainly possible, but given the extent of political meddling in the allotment of ration shops to transportation of grains, it has never been attempted in right earnest.
For several decades now, the international emphasis has been to force India to dismantle the PDS. The first attempt was made at the time of the infamous Dunkel draft during the primitive years of world trade negotiations. WTO aimed at curtailing the PDS role, and wanted markets to ensure food security. Strong opposition from India, cutting across political lines, forced the WTO to eventually withdraw that clause.Subsequently, in the name of decentralisation of food procurement and storage system, an attempt was made during the tenure of Atal Bihari Vajpayee to divest the Centre of its onerous responsibility of procuring foods for the central pool, and leave it to the States to manage grain procurement, storage and distribution.
Several chief ministers had opposed the decentralisation move thereby forcing the government to retreat.
For several years now, the emphasis has once again been on discarding food procurement. Allowing Food Corporation of India (FCI) to increasingly take on a commercial role by shifting focus from its sovereign role of ensuring domestic food security to looking for opportunities for grain exports, and finally to engage in future trading in wheat so as to offload and earn profits from the mounting surplus it carries. This has also to be seen in conjunction with the proposal to cap food procurement to the country’s buffer stock needs, and thereby deprive farmers of getting benefit of the assured price of wheat and rice. At present, FCI is under an obligation to purchase the surplus grains flowing in to the mandisat the Minimum Support Price. Once this role is withdrawn, farmers would be left at the mercy of trade.
Providing cash in the hands of poor beneficiaries means less emphasis on the PDS ration shops. The idea is to provide coupons or provide food entitlements in the form of cash, and leaving it to the people to buy their quota from the market. Whether the money provided would be used primarily to buy liquor, junk foods or other consumer goods is an important issue, but what is more important is to understand how it is aimed at dismantling the food procurement system. This subtle way, very cleverly designed, would undo the gains of food self-sufficiency so assiduously achieved after the advent of Green Revolution.
The underlying objective is very clear. Once the direct cash transfers begin, the ration shops would be gradually phased out. Once the PDS shops are removed, the cap in food procurement that is being suggested for FCI will come into play. With food procurement limited to meet the buffer requirements, which is somewhere between 14 to 22 million tonnes a year (against 82.3 million tonnes stocked with the FCI in June 2012), wheat and rice farmers would no longer get the benefit of the minimum support price. Farmers would be left to face the vagaries of the trade, and as has been the experience in those States which do not have a robust system of mandisand thereby unable to provide farmers with assured prices, distress sale will become a norm.
Withdrawal of food procurement system will have an impact on food production. This would help farmers to abandon farming, and migrate to the urban centres. This is exactly what the World Bank has been proposing for several years now. The 2008 World Development Report had called for land rentals and providing farmers with training opportunities so that they can be absorbed in the industry. The government, as directed, made budgetary provisions for setting up 1000 industrial training institutes across the country. It is therefore obvious that the government had wanted to withdraw from food procurement and distribution for quite long now, following the dictates of the World Bank/IMF. Cash-for-food will facilitate the process and make it easy. Food requirement will then have to be met from imports, and there is already a dominant thinking within the government which advocates importing subsidised food off-the-shelf from the western countries rather than spending more on growing food within the country.
FDI in retail comes at a time when contract farming is receiving greater attention. The idea is to link the farmers growing cash crops with the supermarkets. This will help the government from doing away with the system of announcing the minimum support price and thereby reduce the subsidy outgo. This is exactly what the World Trade Organisation (WTO) had wanted several decades ago. The process to dismantle food procurement, a highly emotive issue in India, actually began in mid 1990s. It is now receiving the final touches.
Prime Minister Manmohan Singh had repeatedly said that the country has 70 per cent more farmers than what is required. Cash-for-food will provide the smokescreen needed to accomplish what the WTO/World Bank/IMF have been telling India for long. It is only when of the farming population is moved out of the villages that the agribusiness can find a stronghold in India. The predominant economic thinking is that the population in agriculture has to be cut back drastically for any country to grow economically. Cash transfers will then be part of the bigger promise of igniting country’s economic growth. #
While the media as well as most panellists who frequent the TV channels, for some strange reasons, were and are still reluctant to talk about the political ramifications of cash transfers, it was Rahul Gandhi who made it abundantly clear when he told his party men that cash transfer could win them not only 2014 but also the 2019 general elections. The entire academic euphoria over the proposed aggressive roll out of Aadhar-based (UID-lined) cash therefore is simply overbearing and needs to be seen in the light of political bias. In fact, the visible trend in the ongoing national debate is more towards being seen as politically correct.
A World Bank working paper, entitled: “Conditional Cash Transfers, Political Participation and Voting Behaviour,” studied the voting behaviour for a conditional cash transfer programme launched in Colombia just before the 2010 elections. Subsequently, a 2011 study of an unconditional cash transfer programme in Uruguay clearly established that cash transfers did help the ruling party get a large share of the votes, and thereby helped the party to romp home at the back of cash transfers. In India, the political urgency and the aggressiveness with which the massive cash transfers are expected to cover the entire country by April 2014 is therefore quite obviously aimed at bringing electoral benefit to the ruling party.
The unconditional direct cash transfer programme that is proposed to be launched from Jan 1 in three phases will start with 43 districts involving a cash provision of Rs 20,000-crore. Eventually, all forms of subsidies to the poor, including food and fertiliser, will be in the form of cash flow, and would add up to Rs 3 lakh crore annually. I fail to understand how and why such a massive cash outflow pipeline will reach the beneficiaries without first putting up a fool-proof delivery system in place. The Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) too was envisioned with a lot of expectations but has failed miserably to deliver. Several studies have pointed to nearly 70-80 per cent leakages, and yet somehow the impression is that MNREGA has transformed the rural economics.
With only 40 per cent of the population having access to banks, and with an over ambitious target of reaching the remaining population through banking correspondents – who will be operating like the village postmen except they will now be equipped with portable handheld machines acting like micro-ATMs – we are perhaps expecting too much from the most important human link between the technology and the money delivery. So far, there are only 70,000 banking correspondents and the experience has not been very encouraging. In the next one year, the number of banking correspondents will have to increase ten-fold to reach a staggering figure of 7 lakh.
Knowing that the entire rural and agricultural banking operations are rooted in corruption, I wonder how we have accepted that the banking correspondents will not be swayed by corrupt practices. If 60 per cent of the beneficiaries have to be reached through an army of banking correspondent, who will be handling over Rs 1.5 lakh crore by any conservative estimate, the delivery mechanism is certainly fraught with over-confidence stemming from political urgency. This is where I think the policy makers and bureaucrats have failed to rise above assumptions. This is where I think the aadhar-based cash-for-vote will end up being no different than the hype generated at the time of launching MNREGA.
Nevertheless, what worries me more is when cash transfers move to the next phase, and that means meeting food entitlements directly with cash. Thanks to the concerns raised by the civil society, the government has deferred cash-for-food for the time being. It was more because of the fear that the cash-for-food programme could go completely out of control, and therefore could negate the political advantage that the ruling party is hoping to garner, that it has been kept in abeyance. At a time when the proposed National Food Security bill is pending introduction before the 2014 elections, any tampering without a proper evaluation could backfire.
It is true that close to 60 per cent of the food that is channelized through the public distribution system is either wasted or siphoned off in transit, and that the entire system is mired in corruption. What reaches the poor beneficiaries is often not even fit for consumption. The answer however does not lie in dismantling the PDS system, but reforming the world-largest food delivery system to riddle it of corruption, and make it more effective. This is certainly possible, but given the extent of political meddling in the allotment of ration shops to transportation of grains, it has never been attempted in right earnest.
For several decades now, the international emphasis has been to force India to dismantle the PDS. The first attempt was made at the time of the infamous Dunkel draft during the primitive years of world trade negotiations. WTO aimed at curtailing the PDS role, and wanted markets to ensure food security. Strong opposition from India, cutting across political lines, forced the WTO to eventually withdraw that clause.Subsequently, in the name of decentralisation of food procurement and storage system, an attempt was made during the tenure of Atal Bihari Vajpayee to divest the Centre of its onerous responsibility of procuring foods for the central pool, and leave it to the States to manage grain procurement, storage and distribution.
Several chief ministers had opposed the decentralisation move thereby forcing the government to retreat.
For several years now, the emphasis has once again been on discarding food procurement. Allowing Food Corporation of India (FCI) to increasingly take on a commercial role by shifting focus from its sovereign role of ensuring domestic food security to looking for opportunities for grain exports, and finally to engage in future trading in wheat so as to offload and earn profits from the mounting surplus it carries. This has also to be seen in conjunction with the proposal to cap food procurement to the country’s buffer stock needs, and thereby deprive farmers of getting benefit of the assured price of wheat and rice. At present, FCI is under an obligation to purchase the surplus grains flowing in to the mandisat the Minimum Support Price. Once this role is withdrawn, farmers would be left at the mercy of trade.
Providing cash in the hands of poor beneficiaries means less emphasis on the PDS ration shops. The idea is to provide coupons or provide food entitlements in the form of cash, and leaving it to the people to buy their quota from the market. Whether the money provided would be used primarily to buy liquor, junk foods or other consumer goods is an important issue, but what is more important is to understand how it is aimed at dismantling the food procurement system. This subtle way, very cleverly designed, would undo the gains of food self-sufficiency so assiduously achieved after the advent of Green Revolution.
The underlying objective is very clear. Once the direct cash transfers begin, the ration shops would be gradually phased out. Once the PDS shops are removed, the cap in food procurement that is being suggested for FCI will come into play. With food procurement limited to meet the buffer requirements, which is somewhere between 14 to 22 million tonnes a year (against 82.3 million tonnes stocked with the FCI in June 2012), wheat and rice farmers would no longer get the benefit of the minimum support price. Farmers would be left to face the vagaries of the trade, and as has been the experience in those States which do not have a robust system of mandisand thereby unable to provide farmers with assured prices, distress sale will become a norm.
Withdrawal of food procurement system will have an impact on food production. This would help farmers to abandon farming, and migrate to the urban centres. This is exactly what the World Bank has been proposing for several years now. The 2008 World Development Report had called for land rentals and providing farmers with training opportunities so that they can be absorbed in the industry. The government, as directed, made budgetary provisions for setting up 1000 industrial training institutes across the country. It is therefore obvious that the government had wanted to withdraw from food procurement and distribution for quite long now, following the dictates of the World Bank/IMF. Cash-for-food will facilitate the process and make it easy. Food requirement will then have to be met from imports, and there is already a dominant thinking within the government which advocates importing subsidised food off-the-shelf from the western countries rather than spending more on growing food within the country.
FDI in retail comes at a time when contract farming is receiving greater attention. The idea is to link the farmers growing cash crops with the supermarkets. This will help the government from doing away with the system of announcing the minimum support price and thereby reduce the subsidy outgo. This is exactly what the World Trade Organisation (WTO) had wanted several decades ago. The process to dismantle food procurement, a highly emotive issue in India, actually began in mid 1990s. It is now receiving the final touches.
Prime Minister Manmohan Singh had repeatedly said that the country has 70 per cent more farmers than what is required. Cash-for-food will provide the smokescreen needed to accomplish what the WTO/World Bank/IMF have been telling India for long. It is only when of the farming population is moved out of the villages that the agribusiness can find a stronghold in India. The predominant economic thinking is that the population in agriculture has to be cut back drastically for any country to grow economically. Cash transfers will then be part of the bigger promise of igniting country’s economic growth. #
What do you do when Heads of State indulge in lobbying ?
The chorus is getting louder. So what if Wal-Mart had spent Rs 125 crore ($25 million) in lobbying to gain access to the lucrative Indian retail market. After all, it's not one-off case, US firms have been doing it for long, says another news report (Hindustan Times, Dec 12, 2012. http://bit.ly/X9pbfg). Not only the print media, almost all TV discussions in India in the past few days have by and large carried the same line.
The demand is for legalising lobbying, following the pattern in the US, and thereby bringing in some regulations to make it more transparent. After all, the US has 12,220 lobbyists (consultants, lawyers, associations, corporations, NGOs etc) registered in 2011. There are over 15,000 lobbyists based in Brussels alone, who try to influence the European Union legislative process. In India, except for the industry lobbying groups -- Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (Assocham India) -- not much is known about the other players in lobbying.
There are layers at which lobbying operates. Starts with academic institutes, and then goes to economists and scientists. They help with funded studies and reports that come in handy to convince the bureaucrats and politicians. Media then steps in raising the pitch. And finally, it is the politicians, political parties and ministers who remain the prime targets.
But what worries me more is when Heads of State start indulging in lobbying. If you have followed the news reports regularly, all Heads of State of major economic powers who visited India after 2009 had lobbied strongly in favour of FDI in retail. US President Barack Obama, UK Prime Minister David Cameron, Former French President Nicholos Sarkozy and German Chancellor Angela Merkel had impressed upon the Indian Prime Minister Manmohan Singh on the need to open up for big retail. US Secy of State Hilary Clinton, who had earlier served on the board of Wal-Mart, had even gone to the extent of lobbying with the West Bengal chief minister Mamata Banerjee when her party Trinamool Congress was part of the UPA-II Coalition in India.
Although the Indian government has agreed to institute an inquiry in to the specific case of Wal-Mart lobbying to know who was paid , if at all some payments were made, to influence the political decision making, the fact remains that the rut runs much deeper than what is visible. Take the case of Dow Chemicals, which later bought Union Carbide. According to a news report, Dow Chemicals had in 2011 spent $ 8 million (Rs 50-crore) to seek market access in Thailand, India and China. Well, this is is only one of the activities that companies often indulge in. Prior to lobbying activities in 2011, the US Securities and Exchange Commission had in 2007 fined Dow Chemicals $325,000 for bribing Indian officials to fast track permission to sell their pesticides brand that are banned in the US and many other countries (Dow bribed Indian officials with cash. jewellery and hospitality, Economic Times, June 28, 2010. http://bit.ly/RoiHwg).
India had instituted a Central Bureau of Investigation (CBI) inquiry into the bribery case. But did you hear anything after the case was filed? And knowing how the Union Carbide was for all practical purposes let off the hook for its role in Bhopal Gas disaster, big business would never be held accountable for its acts of omission and commission, forget about criminal culpability.
Monsanto, the global seed and technology giant, is known to be aggressively pursuing the introduction of controversial genetically-modified crops in the developing world. In 2005, the US Department of Justice had charged Monsanto with bribing Indonesian officials, and the company had agreed to pay a fine of US$ 1 million (Department of Justice, http://1.usa.gov/12764b3). Interestingly, the bribe amount of $50,000 to a senior Ministry of Environment official was shown as 'consultancy fee' in the company's books. In other words, it was shown as a lobbying fee. How does one therefore try to separate lobbying from bribery? No company has a separate head for bribery in its books and records. I don't know how can an inquiry separate the grains from chaff?
The GM industry has set up an NGO for lobbying purposes. The International Service for the Acquisition of Agri-biotech Applications (ISAAA) has an office in India, like many other developing countries. It lobbies with the scientific institutions as well as the politicians. There are instances of such lobby groups routinely taking journalists and government officials on visit to Monsanto's headquarters in America. This may be purely legitimate form of lobbying, but goes a long way in manipulating public opinion. Coming back to Wal-Mart, the New York Times had sometimes back had taken the lid off a massive scandal by Wal-Mart in Mexico -- where it allegedly paid bribes to seek expansion of its stores (Wal-Mart's US expansion plans complicated by bribery scandal. NYT April 29, 2012. http://nyti.ms/VBF5h8). In India too, an investigation has been launched into the violations of the foreign investment rules by Wal-Mart.
I don't therefore understand how can we believe that lobbying is completely a pious and legitimate activity unless we try to dig out how the companies bribe officials, and that includes economists, agricultural scientists and media owners, to get its way through. Lobbyists have known to be moving in the corridors of power, and more often than not carrying a bag of money. Ask any business and political journalist and they will tell you who's who of the corporates who have their lobbyists moving in the corridors of power. Not only Niira Radia, quote a large number of corporate lobbyists have been successful on the job, and seemingly operate silently without the public glare. Most decisions that you think have been taken in the national interest are actually swayed by money bags. Isn't that lobbying? Isn't lobbying therefore a cleaver phrase to provide a neat cover-up to everything bad associated with bribery?
It is a known secret that media remains one of the biggest beneficiary of lobbying. Not carrying a news report, which obviously benefits the corporate client, is one such unnoticed activity that media indulges in very frequently. Let me illustrate. At the height of the Wal-Mart debate in parliament, some media houses (who knew about it) had refused to carry a news report from Punjab which showed Wal-Mart paying a meager Rs8 to farmers growing baby corn. Wal-Mart sold it in wholesale for Rs 100/kg, making a neat Rs 92 in the process. This would have negated and exposed the government's claim that big retail would provide a better price to farmers by removing middlemen. Moreover, some of the major newspapers have never (or rarely) carried any critical view on FDI in retail. We know it why. Still more importantly, the way media appears more than keen to seek legitimacy for lobbying raises eyebrows.
Lobbying has over the years become more sophisticated. It is not only a particular bureaucrat or a government official who gets an all-paid foreign trip or jewellery or other expensive gifts (like the way doctors are bribed by pharmaceutical companies as part of the lobbying activities to promote their brand of drugs), lobbying is now becoming a diplomatic activity. Several times we know how the US Ambassador in India (backed by the USIS and USAID) for instance had lobbied hard to push American commercial interests, including the nuclear treaty. EU diplomatic missions regularly hobnob with Indian officials lobbying on behalf of their respective businesses. Sometimes back, Wikileaks had exposed the use of diplomatic channels for lobbying across the world. Diplomatic lobbying also comes with arm-twisting, if required. Many such instances were exposed in Wikileaks.
Also see: The world of lobbyists. Deccan Herald.
http://www.deccanherald.com/
The demand is for legalising lobbying, following the pattern in the US, and thereby bringing in some regulations to make it more transparent. After all, the US has 12,220 lobbyists (consultants, lawyers, associations, corporations, NGOs etc) registered in 2011. There are over 15,000 lobbyists based in Brussels alone, who try to influence the European Union legislative process. In India, except for the industry lobbying groups -- Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (Assocham India) -- not much is known about the other players in lobbying.
There are layers at which lobbying operates. Starts with academic institutes, and then goes to economists and scientists. They help with funded studies and reports that come in handy to convince the bureaucrats and politicians. Media then steps in raising the pitch. And finally, it is the politicians, political parties and ministers who remain the prime targets.
But what worries me more is when Heads of State start indulging in lobbying. If you have followed the news reports regularly, all Heads of State of major economic powers who visited India after 2009 had lobbied strongly in favour of FDI in retail. US President Barack Obama, UK Prime Minister David Cameron, Former French President Nicholos Sarkozy and German Chancellor Angela Merkel had impressed upon the Indian Prime Minister Manmohan Singh on the need to open up for big retail. US Secy of State Hilary Clinton, who had earlier served on the board of Wal-Mart, had even gone to the extent of lobbying with the West Bengal chief minister Mamata Banerjee when her party Trinamool Congress was part of the UPA-II Coalition in India.
Although the Indian government has agreed to institute an inquiry in to the specific case of Wal-Mart lobbying to know who was paid , if at all some payments were made, to influence the political decision making, the fact remains that the rut runs much deeper than what is visible. Take the case of Dow Chemicals, which later bought Union Carbide. According to a news report, Dow Chemicals had in 2011 spent $ 8 million (Rs 50-crore) to seek market access in Thailand, India and China. Well, this is is only one of the activities that companies often indulge in. Prior to lobbying activities in 2011, the US Securities and Exchange Commission had in 2007 fined Dow Chemicals $325,000 for bribing Indian officials to fast track permission to sell their pesticides brand that are banned in the US and many other countries (Dow bribed Indian officials with cash. jewellery and hospitality, Economic Times, June 28, 2010. http://bit.ly/RoiHwg).
India had instituted a Central Bureau of Investigation (CBI) inquiry into the bribery case. But did you hear anything after the case was filed? And knowing how the Union Carbide was for all practical purposes let off the hook for its role in Bhopal Gas disaster, big business would never be held accountable for its acts of omission and commission, forget about criminal culpability.
Monsanto, the global seed and technology giant, is known to be aggressively pursuing the introduction of controversial genetically-modified crops in the developing world. In 2005, the US Department of Justice had charged Monsanto with bribing Indonesian officials, and the company had agreed to pay a fine of US$ 1 million (Department of Justice, http://1.usa.gov/12764b3). Interestingly, the bribe amount of $50,000 to a senior Ministry of Environment official was shown as 'consultancy fee' in the company's books. In other words, it was shown as a lobbying fee. How does one therefore try to separate lobbying from bribery? No company has a separate head for bribery in its books and records. I don't know how can an inquiry separate the grains from chaff?
The GM industry has set up an NGO for lobbying purposes. The International Service for the Acquisition of Agri-biotech Applications (ISAAA) has an office in India, like many other developing countries. It lobbies with the scientific institutions as well as the politicians. There are instances of such lobby groups routinely taking journalists and government officials on visit to Monsanto's headquarters in America. This may be purely legitimate form of lobbying, but goes a long way in manipulating public opinion. Coming back to Wal-Mart, the New York Times had sometimes back had taken the lid off a massive scandal by Wal-Mart in Mexico -- where it allegedly paid bribes to seek expansion of its stores (Wal-Mart's US expansion plans complicated by bribery scandal. NYT April 29, 2012. http://nyti.ms/VBF5h8). In India too, an investigation has been launched into the violations of the foreign investment rules by Wal-Mart.
I don't therefore understand how can we believe that lobbying is completely a pious and legitimate activity unless we try to dig out how the companies bribe officials, and that includes economists, agricultural scientists and media owners, to get its way through. Lobbyists have known to be moving in the corridors of power, and more often than not carrying a bag of money. Ask any business and political journalist and they will tell you who's who of the corporates who have their lobbyists moving in the corridors of power. Not only Niira Radia, quote a large number of corporate lobbyists have been successful on the job, and seemingly operate silently without the public glare. Most decisions that you think have been taken in the national interest are actually swayed by money bags. Isn't that lobbying? Isn't lobbying therefore a cleaver phrase to provide a neat cover-up to everything bad associated with bribery?
It is a known secret that media remains one of the biggest beneficiary of lobbying. Not carrying a news report, which obviously benefits the corporate client, is one such unnoticed activity that media indulges in very frequently. Let me illustrate. At the height of the Wal-Mart debate in parliament, some media houses (who knew about it) had refused to carry a news report from Punjab which showed Wal-Mart paying a meager Rs8 to farmers growing baby corn. Wal-Mart sold it in wholesale for Rs 100/kg, making a neat Rs 92 in the process. This would have negated and exposed the government's claim that big retail would provide a better price to farmers by removing middlemen. Moreover, some of the major newspapers have never (or rarely) carried any critical view on FDI in retail. We know it why. Still more importantly, the way media appears more than keen to seek legitimacy for lobbying raises eyebrows.
Lobbying has over the years become more sophisticated. It is not only a particular bureaucrat or a government official who gets an all-paid foreign trip or jewellery or other expensive gifts (like the way doctors are bribed by pharmaceutical companies as part of the lobbying activities to promote their brand of drugs), lobbying is now becoming a diplomatic activity. Several times we know how the US Ambassador in India (backed by the USIS and USAID) for instance had lobbied hard to push American commercial interests, including the nuclear treaty. EU diplomatic missions regularly hobnob with Indian officials lobbying on behalf of their respective businesses. Sometimes back, Wikileaks had exposed the use of diplomatic channels for lobbying across the world. Diplomatic lobbying also comes with arm-twisting, if required. Many such instances were exposed in Wikileaks.
Also see: The world of lobbyists. Deccan Herald.
http://www.deccanherald.com/
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